General Terms
Numerical or verbal descriptions that usually result from some sort of measurement.
What is information?
This type of accounting provides managers and employees with information needed to make decisions.
What is managerial accounting?
The resources a business owns (cash, inventory, equipment, etc.)
What are assets?
A summary of a firm's revenues and expenses during a specified accounting period.
What is an income statement?
A number that shows the relationship between two elements of a firm's financial statements.
What is a financial ratio?
Data presented in a form that is useful for a specific purpose.
What is information
This type of accounting generates financial statements and reports for interested people outside of the organization.
What is financial accounting?
The firm's debts (borrowed money, etc.)
What are liabilities?
This financial statement illustrates how the company's operating, investing, and financing activities affect cash during an accounting period.
What is the statement of cash flows?
The financial ratio calculated using the following equation:
Net Income After Taxes / Net Sales
What is return on sales (or profit margin)?
A type of computer program that uses artificial intelligence to imitate a human's ability to think.
What is an expert system?
This type of accounting determines the cost of producing specific products or services.
What is cost accounting?
The difference between total assets and total liabilities.
What is owner's equity?
This financial statement is also sometimes referred to as a statement of financial position.
What is a balance sheet?
The financial ratio calculated using the following equation:
Current Assets / Current Liabilities
What is the current ratio?
A measure that summarizes a particular characteristic of an entire group of numbers.
What is a statistic?
This type of accounting involves planning tax strategy and preparing tax returns.
What is tax accounting?
A system in which each financial entry is recorded as two separate entries to maintain balance in the accounting equation.
What is double-entry bookkeeping?
On the balance sheet, these are debts that will be repaid in one year or less.
What are current liabilites?
The financial ratio calculated using the following equation:
Cost of goods sold / Average inventory
What is inventory turnover?
An accepted set of guidelines and practices for US companies reporting financial information.
What is GAAP?
This type of accounting provides basic accounting services to ensure that tax returns are collected.
What is government accounting?
A report distributed to stockholders and other interested parties describing a firm's financial condition.
What is an annual report?
On the balance sheet, these are assets that will be held or used for a period longer than one year.
What are fixed assets?
Beginning inventory + Net Purchases - Ending Inventory
What is Cost of Goods Sold?